that the security situation in North Nigeria drives transports prices up by ...... Nigeria as monitoring food prices is
Lake Crisis
Chad
Basin
Regional Market Assessment June 2016 Data collected January – February 2016
Acknowledgments This study was prepared by Stephanie Brunelin and Simon Renk. Primary data was collected in collaboration with ACF and other partners, under the overall supervision of Simon Renk. Acknowledgments go to Abdoulaye Ndiaye for the maps and to William Olander for cleaning the survey data. The mission wishes to acknowledge valuable contributions made by various colleagues in WFP country office Chad and WFP Regional Bureau Dakar. Special thanks to Cecile Barriere, Yannick Pouchalan, Maggie Holmesheoran, Patrick David, Barbara Frattaruolo, Ibrahim Laouali, Mohamed Sylla, Kewe Kane, Francis Njilie, Analee Pepper, Matthieu Tockert for their detailed and useful comments on earlier versions of the report. The report has also benefitted from the discussions with Marlies Lensink, Malick Ndiaye and Salifou Sanda Ousmane. Finally, sincere appreciation goes to the enumerators, traders and shop-owners for collecting and providing information during the survey.
Acronyms ACF
Action Contre la Faim
ACLED
Armed Conflict Location and Event Data Project
FAO
Food and Agriculture Organization
FEWS NET
Famine Early Warning System Network
GDP
Gross Domestic Product
GPI
Gender Parity Index
IDP
Internally Displaced People
IFC
International Finance Corporation
IMF
International Monetary Fund
IOM
International Organization for Migration
MT
Metric Ton
NAMIS
Nigeria Agricultural Market Information Service
OHCHR
Office of the United Nations High Commissioner for Human Rights
UNESCO
United Nations Educational, Scientific and Cultural Organization
USDA
U.S. Department of Agriculture
WFP
World Food Programme
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Table of Content Acknowledgments ...................................................................................................................... 2 Acronyms ................................................................................................................................... 2 Table of Content ......................................................................................................................... 3 List of figures and tables ............................................................................................................ 4 Executive summary .................................................................................................................... 6 1.
Introduction ......................................................................................................................... 8
2.
Methodology and limits ...................................................................................................... 8
3.
Context ................................................................................................................................ 9
4.
Food availability ............................................................................................................... 13
5.
Trader characteristics ........................................................................................................ 14
6.
Trade flows and market access ......................................................................................... 18
7.
Supply chain ...................................................................................................................... 22
8.
9.
7.1.
Changes in supply sources ......................................................................................... 22
7.2.
Strategies to cope with price increases or supply problems ...................................... 22
Price .................................................................................................................................. 23 8.1.
Price level and price volatility ................................................................................... 23
8.2.
Price seasonality ........................................................................................................ 28
Volumes ............................................................................................................................ 29
10. Response capacity ............................................................................................................. 30 11. Main constraints ................................................................................................................ 34 12. Stock strategy .................................................................................................................... 36 13. Source of funding and credit access .................................................................................. 38 14. Concluding remarks and suggestions ................................................................................ 40 Bibliographie ............................................................................................................................ 42 Annex A: Additional tables and figures ................................................................................... 43 Annex B: Decision making process ......................................................................................... 55 Annex C: Limits and suggestions for improving questionnaire design ................................... 58
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List of figures and tables Figure 1: Violent activity by type in North Nigeria (Yobe, Adawama and Borno) ................. 10 Map 1: Number of conflict related fatalities between 2010 and 2015 ..................................... 12 Figure 2: Calendar of a typical cereal marketing year in the Sahel ......................................... 13 Figure 3: Gender of customers ................................................................................................. 15 Figure 4: Traders’ age by gender ............................................................................................. 16 Figure 5: Traders’ age by type of traders ................................................................................. 16 Figure 6: Level of education among traders ............................................................................. 17 Map 2: Trade flows of cereals – January 2016 ........................................................................ 19 Figure 7: Share of traders who change the source of supply of their commodities since the start of their activity ......................................................................................................................... 22 Figure 8: Average retail prices of millet in Chad, Niger and Nigeria (CFAF/kg) ................... 24 Figure 9: Millet price in CFAF/kg ........................................................................................... 24 Figure 10: Average retail prices of sorghum in Chad, Niger and Nigeria (CFAF/kg) ............ 25 Figure 11: Sorghum price in CFAF/kg .................................................................................... 25 Figure 12: Maize price in CFAF/kg ......................................................................................... 26 Figure 13: Average retail prices of maize in Chad, Niger, Cameroon and Nigeria (CFA/kg) 27 Figure 14: Average retail prices of rice in Chad, Niger, Cameroon and Nigeria (CFAF/kg) .. 27 Figure 15: Prices of imported rice in CFAF/kg........................................................................ 28 Figure 16: Seasonal pattern of cereals (2008-2015, CFAF/KG) .............................................. 29 Figure 17: Response capacity to a 100 percent increase in demand ........................................ 31 Figure 18: Response capacity to a 100 percent increase in demand in Cameroon .................. 32 Figure 19: Response capacity to a 100 percent increase in demand in Chad ........................... 32 Figure 20: Response capacity to a 100 percent increase in demand in Niger .......................... 33 Figure 21: Response capacity to a 100 percent increase in demand in Nigeria ....................... 34 Figure 22: First constraint faced by transporters (%) ............................................................... 36 Figure 23: Time of the year when traders experience stockout ............................................... 37 Figure 24: Main source of funding for traders by gender ........................................................ 39 Figure A1: Number of reported fatalities by region ................................................................. 43 Figure A2a: Maize production (1000 MT) ............................................................................... 44 Figure A2b : Millet production (1000 MT) .............................................................................. 44 Figure A2c : Milled rice production (1000 MT) ...................................................................... 44 Figure A2d : Sorghum production (1000 MT) ......................................................................... 44 Figure A3a: Average number of customer per trader per week in Cameroon ......................... 45 Figure A3b: Average number of customer per trader per week in Chad ................................. 45 Figure A3c: Average number of customer per trader per week in Niger ................................. 46 Figure A3d: Average number of customer per trader per week in Nigeria .............................. 46 4
Figure A4a: Sum of weekly sale by market for respectively the main local and imported good in Cameroon (MT) ................................................................................................................... 47 Figure A4b: Sum of weekly sale by market for respectively the main local and imported good in Chad (MT) ............................................................................................................................ 47 Figure A4c: Sum of weekly sale by market for respectively the main local and imported good in Niger (MT) ........................................................................................................................... 48 Figure A4d: Sum of weekly sale by market for respectively the main local and imported good in Nigeria (MT) ........................................................................................................................ 48 Table 1: Number of actors interviewed by country and region .................................................. 9 Table 2: Traders’ type by selling point* .................................................................................. 14 Table 3: Food commodities sold by at least 30 percent of the traders ..................................... 18 Table 4: Cities that are difficult to access by truck during the rainy season ............................ 20 Table 5: Market access ............................................................................................................. 21 Table 6: Unusual strategies developed by traders to cope with price increase or supply problems 23 Table 7: Top 10 constraints faced by traders by gender (%).................................................... 35 Table 8: Top 10 constraints faced by traders by trader’s type (%) .......................................... 35 Table 9: Share of wholesalers storing products from the previous campaign for reselling them later .......................................................................................................................................... 37 Table 10: Average duration of grain storage in months during the 2014/15 campaign ........... 38 Table 11: Share of traders selling products on credit (%) ........................................................ 40 Table A1: Number of traders by type of trade ......................................................................... 49 Table A2: Millet prices characteristics (01/2008-12/2015 in CFAF/kg) ................................. 51 Table A3: Sorghum prices characteristics (01/2008-12/2015 in CFAF/kg) ............................ 52 Table A4: Maize prices characteristics (01/2008-12/2015 in CFAF/kg) ................................. 53 Table A5: Rice prices characteristics (01/2008-12/2015 in CFAF/kg) .................................... 54 Table B1: Who decides whether you will take out credit to finance trade activities most of the time? (%) .................................................................................................................................. 55 Table B2: Who decides how much of your generated income will be spent on food for your household most of the time?..................................................................................................... 55 Table B3: Who decides whether you will sell this product most of the time? (%) (For the main local product)............................................................................................................................ 56 Table B4: Who decides at what price you will sell this product most of the time? (%) (For the main local product .................................................................................................................... 56 Table B5: Who decides from whom/where you will purchase this product most of the time? (%) (For the main local product ...................................................................................................... 57 Table C1: Data quality issues when traders were asked to identify the main national product and the main imported product................................................................................................. 59 Table C2: Number of transporters interviewed by country...................................................... 60 5
Executive summary Since 2012, the security situation in North Nigeria has dramatically worsened leading to massive displacement of population, not only within Nigeria but also in neighboring Cameroon, Chad and Niger. The ongoing conflict strongly affect food security in the northeast as people suffer from serious restrictions to their livelihood. Considering this situation, the WFP Regional Bureau for West Africa, in collaboration with ACF and other partners, launched a regional market assessment in the Lake Chad basin. This market assessment aims at addressing information needs to support the national and regional humanitarian response, and strengthen market baselines across the four countries. The report relies on secondary data analysis, consultations with WFP, FAO, FEWS NET and National Early Warning Systems and Markets Information Systems and a primary data collection exercise through markets survey that covered 104 cities located in 10 regions and 4 countries around the Lake Chad Basin: Nigeria, Niger, Chad and Cameroon. The market assessment was conducted in January and February 2016 and the survey was administered to 1619 traders and 620 transporters. The Boko Haram-related conflict in Northeast Nigeria is persisting. According to IOM (April 2016), 1,856,616 IDPs have been displaced by the insurgency and 92 percent of them are in Borno, Adamawa and Yobe, which are the three Nigerian states covered by the survey. In addition to the security situation, Nigeria faces economics challenges due to the drop in global oil prices and the depreciation of the naira that is likely to reduce the purchasing power of Nigerian traders for imported goods and cash crops from the Sahel. Primary data shows that the place of women in agricultural trade varies between countries. Women account for almost half of the traders in Cameroon whereas female traders make up less than 20 percent of traders in the other countries. Overall, women are more likely to be retailers than wholesalers and are less likely to have employees. The on-going conflict in North Nigeria has disrupted trade flows by forcing traders to change trade routes. Cross-border trade between Nigeria and Niger has been affected as transporters can no longer use the axis Damassack-Diffa because of security reasons. Cross-border flows between the two countries have moved to the west and the Gashua-Geidam-Maine Soroa axis has become a major cross-border trade route for traditional grains, maize and niebe. Cross-border trade between Nigeria and Cameroon seems to have suffered from the conflict as well. Before the conflict, most traffic in north Cameroon flew along the corridor from Maiduguri to Kousseri or Maiduguri to Maroua. In the present survey, only one transporter out of 26 in Cameroon reported Nigeria as its main supply source of cereals suggesting that agricultural trade flows between Northeast Nigeria and North Cameroon have been reduced. The transporters survey shows that transporters in North Nigeria face high transport costs and numerous checkpoints, especially in Borno state. While they are primarily intended to prevent the entry of undesirable individuals and the smuggling of illegal goods, they raise the cost of trucking and are likely to generate delays. 6
Despite these difficulties, most traders in Diffa (Niger), Borno and Yobe (Nigeria) and in Bahr El Gazal (Chad) estimate to have the capacity to respond quickly to a 100 percent increase in demand, should such a significant increase in demand be triggered by a cash and voucher programme. On the other hand, in the North region of Cameroon and in the Lac region of Chad, a large share of traders reported being unable of doubling their sales to meet an important increase in demand. Most traders did not change their sources of supply since the start of their trading activities, suggesting that they managed to keep the same supply source in spite of the security crisis in North Nigeria. In Niger, traders seem reluctant to change suppliers even when they face supply difficulties, which is likely to reflect the role played by trader networks in Niger. An important share of traders rely on suppliers as their main sources of funding, confirming the role played by social networks in agricultural trade in Niger. Lack of own capital is massively reported by traders as their first constraint followed by insecurity. Female traders seem to suffer more than male from the lack of capital and the lack of credit. Indeed, 67 percent of female traders reported lack of own capital as their main constraint compared to 44 percent of male traders, suggesting that women disproportionately face financial access barriers that prevent them from participating in the agricultural trade. At transporter level, insecurity, harassment and poor road infrastructure are the main constraints reported on by transporters. In Chad and Nigeria, insecurity and harassment come first whereas Cameroonian and Nigerien transporters are more concerned by poor road infrastructure.
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1. Introduction Considering the recent humanitarian crisis and the increased displacement in the region, the Vulnerability Assessment and Mapping unit of the WFP Regional Bureau for West Africa, in collaboration with ACF and other partners (including National Early Warning Systems and Markets Information Systems), launched a regional market assessment in the Lake Chad basin. The assessment was conducted in ten regions in Chad, Niger, Nigeria and Cameroon, in the surrounding zones around the Lake Chad Basin. The main objective is to address urgent information needs to support the national and regional humanitarian response, and strengthen market baselines across the four countries. The study assessed the market situation of the on-going crisis and subsequent market disruptions. The main focus was on cereals.
2. Methodology and limits This assessment relies on secondary data analysis and primary data collection. Secondary data include price data collected by FEWS NET, National Early Warning Systems and Market Information Systems as well as political violence and protest data gathered by ACLED (Armed Conflict Location and Event Data Project). Primary data collection was undertaken from midJanuary 2016 to mid-February 2016 in ten regions surrounding the Lake Chad basin1 covering a total of 104 towns and villages (Table 1). Data collection tools include a market questionnaire, a trader questionnaire and a transporter questionnaire. Enumerators collected data in 26 cities in Chad, 24 in Cameroon, 22 in Niger and 30 in Nigeria. On average, the traders’ questionnaire was submitted to 14 traders by city in Chad and Cameroon, 7 in Niger and 19 in Nigeria when Maiduguri is not considered2. The sample size varies between countries with Nigeria being the most represented country in the sample with 734 traders interviewed out of 1620 (Table 1). The city of Maiduguri, which is the capital of Borno state where the concentration of the armed opposition group is the highest, account for 10 percent of the overall sample and 23 percent of the Nigerian sample of traders. The geographic choice for the primary data collection has been limited by the security situation that is still very unstable in North Nigeria. The traders’ questionnaire was administered in only four cities in Borno state: Biu, Kwaya Kusar, Maiduguti and Sabon Kasuwa (Table A1) due to security reasons. The security situation in North Nigeria prevented enumerators to access many villages in Borno states. Men are overrepresented in the sample. The share of women in both samples (traders and transporters) is low, with the exception of the sample in Cameroon where women accounts for 1
The survey covered four regions in Chad including a region named Lac, which can be confusing with the Lake Chad basin. In the rest of the document, we refer to this specific region of Chad as the Lac region whereas we refers to the Lake basin as the Lake Chad basin. 2 The traders’ questionnaire was submitted to 169 traders in Maiduguri. Maiduguri has a special place in the survey as the city is the birthplace of Islamist group Boko Haram's insurgency.
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48 percent of the traders, followed by Chad (23%), Nigeria (11%) and Niger (
